Canada’s credit unions got a regulatory victory this week when the nation’s finance minister announced that CUs and caisses populaires are free to use terms such as “bank” and “banking” in their communications.
Last year, Canada’s federal banking regulator, the Office of the Superintendent of Financial Institutions, issued an advisory calling for a stricter interpretation of the existing Bank Act, the Canadian legislation that relates to the operation of banks and credit unions in the country. As a result, CUs and caisses populaires outside Quebec would not be able to use those terms. The Canadian Credit Union Association at the time called for the federal government to review Bank Act restrictions in order to find a reasonable solution so CUs could continue to use terms like “online banking” and other phrases.
The decision came from Finance Minister Bill Morneau in Canada’s latest federal budget.
A CCUA spokesperson told Credit Union Journal that in order to be come law, the new amendments to the Bank Act must be included in a a Budget Implementation Act, which is typically introduced one to two sitting weeks after the Minister of Finance’s formal Budget announcement.
“The budget implementation legislation will not be introduced before March 19, 2018, and typically takes between eight to ten weeks to become law,” the spokesperson added.
CCUA leadership praised the decision.
“We are obviously pleased with Minister Morneau’s announcement and we would like to thank him and the team at the Department of Finance,” Martha Durdin, CCUA president and CEO, said in a statement.
The goup also acknowledged the “advocacy efforts” of MPs from all parties and the All Party Credit Union Caucus, a body formed last spring to “facilitate communication” between legislators and the credit union industry.
While credit unions do not want to be “confused” with banks, CCUA pointed out, Canadians have always associated the terms “bank” and “banking” with credit unions since the first credit union was formed more than 100 years ago.
“Over 5.3 million Canadians use a credit union for their banking needs and that number is growing,” Durdin added. “Credit unions need to speak to Canadians in a language they have always understood.”